Eskom and Sasol sign agreement on exploring LNG to unlock Gas to Power and mitigate imminent gas shortage for South Africa
20 September 2024
In a landmark move set to reshape South Africa’s energy landscape, Eskom and Sasol today signed a Memorandum of Understanding (MoU) to collaboratively explore and research potential future liquified natural gas (LNG) requirements. The collaboration will also enable the country to find a solution for gas users who require longer term certainty of supply beyond this decade.
The collaboration aims to determine the potential volumes that South Africa requires to establish a viable LNG import market along with the enabling infrastructure, and will be facilitated by government-to-government relations where necessary. This initiative focuses on using gas for power generation to provide essential base load electricity and position gas as a key enabler of re-industrialisation, while also ensuring continued supply to the market by unlocking global LNG resources. Furthermore, the collaboration will contribute to enhancing South Africa’s energy mix and enable the country’s energy transition and decarbonisation.
The MoU, under which Sasol and Eskom will collaborate to drive an intensive initial phase of research and planning, was signed with the full support of the Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa, who delivered the keynote address at the signing ceremony.
“We have made it clear that we are serious about LNG solutions for the country, and that our demand for gas across both industrial and energy frontiers will unlock these solutions,” said Minister Ramokgopa. “This collaboration between our two energy champions – one public, one private – will provide a data-driven and commercially sound basis for gas-fed industrialisation and for us to explore the well-worn path to lower carbon energy that the global north has already taken by scaling gas to power. Gas has emerged as the second-largest contributor to global electricity production, experiencing rapid growth as many countries shift from coal to gas in their energy mix to enable positive implications for climate change, as gas typically emits less CO2 per unit of energy.”